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The GM Tower

Last week's commercial mortgage ratings actions

February 12, 2002


click here for residential ratings actions

click here for subprime ratings actions

Fitch Ratings placed Tyco Capital Corp.'s and related entities' 'A+' senior debt, 'A' subordinated debt, 'A' preferred stock, and 'F1' commercial paper ratings on Rating Watch Negative. The actions follow the Tyco International LTD's announcements about liquidity and offering plans. Fitch continues to have significant concerns over scrutiny Tyco continues to receive and waning access to the capital markets, which could complicate its announced break up plans for the company, including the spin-off of Tyco Capital.

Standard & Poor's (S&P) raised and affirmed classes of LB Commercial Conduit Mortgage Trust's multiclass mortgage pass-through certificates (MPTC's) series 1995-C2. The raised ratings reflect the improved financial operating performance of the collateral pool and the subordination levels but are tempered by the concentration of lodging sector loans. According to the master servicer, GMAC Commercial Mortgage Corp. (GMAC), the 52 mortgages for $169.6 million have a year-end 2000 weighted average debt service coverage ratio (WADSCR) of 1.60 times (x), up from 1.43x at issuance. GMAC says that 11 mortgages for $70.8 million are on its watchlist. S&P has factored in that it expects that the currently weak economic conditions may cause the WADSCR to decline somewhat over the next year or so. The property type concentration includes lodging (28.9%), multifamily (27.9%), self-storage (19.9%), industrial (13.3%), and retail (4.4%).

Classes of Chase Commercial Mortgage Securities Corp.'s commercial MPTC's series 1998-1 were raised and affirmed by S&P, reflecting increased credit support levels, geographic diversity, and a variety of property types. The WADSCR is currently 2.03x, but S&P expects this to decline over the next year. GMAC, the servicer, recently placed 4 loans for $32.7 million on its watchlist.

S&P lowered its rating on the class A-3 certificates of Conseco Commercial Mortgage Trust I's senior commercial MPTC's series 1989-1 to triple-'B'-minus from double-'A', and removed the rating from CreditWatch with negative implications, where it was placed on Jan. 18, 2002. The lowered rating is primarily due to the recent downgrades of Kmart Corp., which recently filed for Bankruptcy protection. The collateral consists of a pool of 36 mortgage loans with an aggregate unpaid principal balance of $70.4 million with a weighted average coupon of 10.1%.

Classes of American Southwest Financial Securities Corp., commercial MPTC's, series 1995-C1, were upgraded and affirmed by Fitch. The upgrades are primarily attributable to an increase in subordination levels. The WADSCR for year-end 2000 is 1.55x according to statements collected on 92% of the pool by the master servicer, Midland Loan Services (Midland).

Fitch upgraded and affirmed classes of GMAC Commercial Mortgage Securities, Inc. MPTC's, series 2000-FL-A, reflecting the level of subordination in the case of the upgrade. According to 2001 financials collected by master servicer GMAC on 86% of the loans, the WADSCR is 1.88x, up from 1.43 when underwritten.

Fitch withdrew its ratings on Resolution Trust Corporation, commercial MPTC's, series 1994-C2, which was terminated upon the successful completion of the sale of the underlying mortgage loans and REO properties.

Classes of SASCO's Floating-Rate Commercial Mortgage Trust's, multiclass MPTC's, series 1998-C3, were upgraded due to the levels of subordination. According to year-end 2000 operating statements collected by master servicer Midland for 97.5% of the loans, the WADSCR is 1.54 compared to 1.46x at closing. Concerns include shifts in loan, borrower, maturity, and property type concentrations. The largest loan in the pool (52%) is secured by the General Motors Building in New York.

Fitch affirmed classes of NSS Mortgage Securities II Corp.'s $34.2 million class A commercial mortgage pay-through bonds, following a review the 1996 transaction. The bonds are secured by 37 cross-collateralized and crossed-defaulted mortgage loans on 35 self-storage properties and two business parks, and the pool's aggregate principal balance is now $46.96 million. The WADSCR is 1.98x, up from 1.60x at origination.

Various classes of First Union National Bank Commercial Mortgage Trust's $728 million commercial MPTC's series 2002-C1 were rated at 'AAA' to 'B-' by S&P, reflecting the level of subordination. The WADSCR is 1.31x, the beginning loan-to-value ratio (LTV) is 93.8 % and the ending LTV is 81.9%.

Sam Garcia has been in mortgage lending since 1980, and is managing editor of MortgageDaily.com. He also owns and operates CloseNow.com, a real estate portal site.

email: [email protected]

Copyright © 2002 Sam Garcia

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